The United States Supreme Court has granted certiorari to review the decision in Riseandshine Corporation, dba Rise Brewing v. Pepsico, Inc., in which the Second Circuit Court of Appeals held that RISE, although suggestive, is weak as a matter of law. Other circuits have treated distinctiveness as a question of fact for a jury, not a judge, to determine. The Court presumably has granted certiorari to resolve the conflict in the circuits.
Rise Brewing v. Pepsico
The lawsuit
Riseandshine Corporation sells nitro-brewed coffee. It registered a trademark in the phrase RISE BREWING CO. for goods in IC 030, namely, coffee-based beverage products.
Subsequently, Pepsico, Inc. launched a canned energy drink under the mark MTN DEW RISE ENERGY. Riseandshine Corporation obatined a preliminary injunction prohibiting Pepsico from using the word RISE in connection with its beverages. The district court granted the injunction, finding that Riseandshine Corporation had established likelihood of success on the merits of a trademark infringement claim.
To reach this conclusion, the district court considered eight factors that courts have deemed relevant to likelihood of confusion. The strength of the mark is one of those factors. See Polaroid Corp. v. Polaroid Electronic Corp. The district court found that the strength of the mark favored the plaintiff.
Pepsico appealed.
Rise and Mtn Dew Rise labels, from the complaint
The Second Circuit Reversal
The Second Circuit Court of Appeals reversed, holding that the district court erred as a matter of law in failing to rule that RISE, as a trademark for coffee beverages, is weak. Although it is a suggestive mark, the Court held it is not strongly distinctive.
The Petition for Certiorari
Riseandshine Corporation filed a petition for certiorari with the United States Surpeme Court. The primary contention made in the petition is that the Court of Appeals improperly treated the question whether a suggestive mark is inhernetly distinctive and “strong” as a question of law rather than a question of fact.
The issue is of practical importance because it can mean the difference between disposing of a lawsuit quickly with a pretrial motion for summary judgmnet vs. needing to wait for a jury (or a judge sitting without a jury) to make factual determinations following a trial.
A fanciful mark is something that is completely made up. Xerox is an example.
An arbitrary mark is one which, although a real word, bears no logical relationship to the product or service. Apple, as a trademark for computers, is an example.
A suggestive mark is one that hints at but does not directly describe a quality or feature of a product or service.
A descriptive mark is one that directly describes a quality or feature of a product or service. It does not qualify for trademark protection unless it acquires secondary meaning as an identifier of the source of a product or service. That is to say, unlike fanciful, arbitrary, and suggestive trademarks, descriptive marks are not inherently distinctive. They can become protected as trademarks only if they acquire distinctiveness.
Generic marks identify an entire class of goods or services.
Fanciful, arbitrary and suggestive marks are considered inherently distinctive. A descriptive mark is disintctive only if additional facts exist that demonstrate that it has become known to consumers as a source-identifier. Generic marks are never distinctive.
Consumer Perception
Booking.com
Booking.com is an online travel reservation service. The USPTO intially denied its application for registration of the domain name as a trademark, deeming it a generic term. Booking.com secured review in the U.S. district court for the Eastern District of Virginia, where it introduced new evidence of consumer perception. The district court found that the consuming public does not perceive BOOKING.COM as a genus of services, but as a description of services available at the website. Having found it to be descriptive rather than generic, the court proceeded to find, additionally, that it had acquired secondary meaning as an identifier of a particular source of travel reservation services.
The Court of Appeals affirmed.
Justice Ginsburg, writing for the majority of the United States Supreme Court, also affirmed.
The USPTO argued to the Court that generic terms “are ineligible for trademark protection as a matter of law” – regardless of how consumers understand them. See USPTO Brief in No. 19-46. The Court rejected that contention, holding instead that the question whether a term is generic depends on its meaning to consumers.
Perceiving suggestiveness
In Booking.com, the court found that consumers did not perceive BOOKING.COM as a generic term for any online reservation service. Rather, consumers viewed it as an identifier of a particular provider of such a service. As Justice Ginsburg observed, “if ‘Booking.com’ were generic, we might expect consumers to understand Travelocity—another such service —to be a ‘Booking.com.'” USPTO v. Booking.com, 591 U.S. _, 140 S. Ct. 2298 (2020).
The question before the Court now is whether the same thing is true of suggestiveness. Does the question whether a term is suggestive (as distinguished from descriptive, for example) also depend on its meaning to consumers?
The Court in Booking.com applied a two-step inquiry: (1) First, do consumers perceive a particular word or string of characters as a generic term or a descriptive term? (2) If they view it as descriptive, has it acquired distinctiveness?
Applying this approach in the present case would yield a two-step inquiry something like this: (1) First, do consumers perceive a particular word or string of characters as descriptive or suggestive? (2) If they view it as suggestive, is it automatically distinctive as a matter of law, or is a further determination that consumers perceive it as an identifier of a particular source of a product or service that has the suggested quality or feature necessary?
This, then, is what the question formally presented for review (Is inherent distinctiveness a question of fact or law?) comes down to.
Conclusion
Because this case is a trademark infringement lawsuit rather than a dispute about registrability, the Court has a golden opportunity to explain whether and how distinctiveness analysis differs when considering its existence as a necessary element of a valid (registrable) trademark, on one hand, and when it is considered as just one of several factors to weigh and consider in a likelihood of confusion analysis. It also presents the Court with an opportunity to shed some light on the murky distinction between descriptiveness and suggestiveness. (See, e.g., The False Dichotomy Between Suggestive and Descriptive Trademarks.)
I didn’t list contributory liability for infringement as one of the enduring non-AI issues in copyright law, but this year’s decision in Cox Communications v. Sony Music Entertainment is a reminder that issues thought to have been resolved years ago can resurface at any time.
Factual Background
Cox Communications, Inc. is an internet service provider selling internet, telephone, and cable television connections to millions of people. Some of its customers used this service to set up peer-to-peer networks such as BitTorrent to distribute copyrighted music without the permission of copyright owners. Sony Music Entertainment and other record companies owned the copyrights in some of these songs. Through the Recording Industry Association of America (RIAA), it hired a company to monitor illegal file sharing and notify internet service providers when it detected infringement. The company sent Cox Communications 163,148 notices of infringement during a two-year period. Cox Communications warned or suspended customers who were repeat infringers, but rarely terminated service for copyright infringement.
Sony and others sued Cox Communications for contributory and vicarious copyright infringement. They claimed that Cox Communications failed to take adequate measures to stop infringement, thereby inducing or materially contributing to its customers’ infringement of music copyrights.
The U.S. District Court for the Eastern District of Virginia denied Cox Communications safe harbor under the Digital Millennium Copyright Act (DMCA) and allowed the case to proceed to trial on theories of vicarious and contributory copyright infringement. The jury found Cox Communications liable on both counts and awarded $1 billion in statutory damages.
The Court of Appeals reversed the vicarious liability verdict, but affirmed the finding of willful contributory infringement. It vacated the damages award and remanded the case for a new trial on damages.
The case ultimately made its way to the United States Supreme Court. The Supreme Court unanimously reversed. Justice Thomas wrote the majority opinion. Justice Sotomayor wrote a concurring opinion.
Legal Background
Direct and Indirect Infringement
A copyright owner has the exclusive right to copy, distribute, display, perform, and make derivative works based on the copyrighted work. The exclusive right to perform a work includes the exclusive right to digitally transmit it. Anyone who exercises one of these exclusive rights without the owner’s consent is an infringer. Statutory damages of up to $150,000 per work may be awarded if infringement is willful. 17 U.S.C. § 504 (c)(2).
A person who actually performs the acts of unlawful reproduction, distribution, performance, etc. is guilty of direct infringement. A person who did not actually perform the infringing act but is responsible in some way for furthering it may be guilty of indirect infringement.
Using an internet service to which you subscribe to reproduce, distribute and transmit copies of musical works without the copyright owners’ permission is an example of direct infringement. Providing a service or facility that customers use to do that is a potential source of contributory liability for infringement, but only under certain conditions.
In this case, Sony sought to hold Cox Communications liable for indirect infringement.
Vicarious and Contributory Liability
Courts recognize two kinds of indirect infringement: vicarious and contributory.
Vicarious liability
Vicarious liability may be imposed when one person has the right and ability to control, supervise and stop another person’s activity. Because employers have this power over their employees, they are often held vicariously liable for their employees’ acts within the course and scope of the employment.
Vicarious liability for infringement requires a showing of direct financial benefit from the infringing activity to the person with supervisory control. The lower courts rejected Sony’s claim of vicarious infringement liability because the financial benefit Cox received from its customers took the form of monthly internet subscription fees. It was not directly tied to infringing activity. Subscribers paid for lawful internet access, not for the ability to infringe copyrights. Cox Communications did not profit specifically or directly from the piracy occurring in the networks its customers set up.
The only issue to reach the United States Supreme Court in this case, therefore, was whether Cox Communications could be held contributorily liable for the infringing acts of its customers.
The common law basis for contributory liability was “material contribution.” A person could be found to have materially contributed to an activity if s/he provided the site and facilities for infringement. No proof of inducement was necessary. Napster, for example, was found to have materially contributed to users’ acts of infringement because it maintained a centralized service with a searchable index of music files for users to download.
Sony Corp. v. Universal City Studios raised the question whether a company that provides products that enable copyright infringement is always contributorily liable for “materially contributing” to users’ acts of direct infringement.
The case involved video recording products, i.e., equipment that people can use to record television programs. The Supreme Court held that recording free, over-the-air broadcasts to watch at a more convenient time is fair use, so long as the recording is made for the viewer’s own personal, noncommercial use. The Court then held that a company is not contributorily liable for infringement merely because it provides a service or product that customers can use to infringe copyrights, provided the product or service has substantial non-infringing uses. Because recording a television program for later viewing is a substantial, non-infringing use, and there was no evidence that Sony said or did anything to encourage customers to make infringing uses of its products, the Court held the company could not be held contributorily liable for infringing acts on the part of the buyers of its products. The short answer, then, is no. Merely providing a product or service that can be used to infringe copyrights will not necessarily result in contributory liability for infringement, provided it has substantial, non-infringing uses.
Inducement
The Court limited the scope of this holding (sometimes called the “Betamax safe harbor”) in Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd. In this case, the Court held that a company does not get the benefit of the Betamax safe harbor for a product or service that has substantial, non-infringing uses if it actively induces infringing uses.
In Grokster, the Court relied on marketing, communications and operational evidence that Grokster had deployed promotional materials and meta-tags designed to capture internet searches for “Napster.” Napster was a file-sharing network that had been shut down after a court ordered it to block users from sharing copyrighted materials. (Napster has since been rebranded as a provider of generative and agentic AI services.) It also distributed newsletters to users touting the availability of copyrighted music and movies to download on its networks. Customer support instructed users on how to locate, download and play copyrighted files.
Even if a product or service has substantial, non-infringing uses, then, contributory liability may arise if a company actively induces infringing uses by soliciting and encouraging infringers to use it and helping customers use it to infringe copyrights.
The Issue in Cox Communications v. Sony
Two rules can be distilled from pre-2026 contributory infringement cases:
1) Furnishing a product or service may result in “material contribution” liability if its primary use is to infringe copyrights.
2) Furnishing a product or service that has substantial, non-infringing uses will not result in contributory liability unless the provider actively induces infringing uses.
The question raised in Cox Communications v. Sony Music was whether failing to stop known infringing uses is also a basis for imposing contributory liability, when the product or service has substantial, non-infringing uses.
The holding in Cox Communications v. Sony Music
The Supreme Court unanimously held that an internet service provider’s failure to stop known infringing uses of its service is not a basis for imposing contributory liability for the infringing uses that customers make of its service. An ISP’s failure to stop known infringement neither induces users’ infringement nor provides an independent, third basis for contributory liability.
The Digital Millennium Copyright Act
The Digital Millennium Copyright Act (DMCA) immunizes ISPs from contributory liability for user-provided content if they have implemented “a policy that provides for the termination in appropriate circumstances of subscribers and account holders” who are repeat infringers. 17 U.S.C. § 512(i)(1)A).
Sony basically argued that this immunity would be unnecessary if ISPs are not liable for providing services to known infringers anyway. Why try to incentivize ISPs to terminate known infringers’ accounts if they are not at risk of liability even in the absence of the DMCA?
The DMCA, however, does not expressly impose liability for providing internet service to known infringers. Another DMCA provision says that failure to comply with the DMCA’s safe harbor conditions “shall not bear adversely upon . . . a defense by the service provider . . . that the service provider’s conduct is not infringing.” 17 U.S.C. § 512(l).
To put it more colloquially, the DMCA’s safe harbor provisions are meant to be a shield, not a sword.
Intent
Although intent has never been an essential element of a copyright infringement claim, Justice Thomas interpreted the Court’s precedents as imposing an intent requirement in contributory infringement claims:
“The provider of a service is contributorily liable for the user’s infringement only if it intended that the provided service be used for infringement. The intent required for contributory liability can be shown only if the party induced the infringement or the provided service is tailored to that infringement.”
Justice Sotomayor agreed that an ISP cannot be held contributorily liable for copyright infringement unless intent is established. She filed a concurring opinion, however, to dispute that inducement and tailoring a product to infringing uses are the only two situations that may support a finding of intent. She would have held the door open for other ways of establishing intent under common law “aiding and abetting” theory.
She also criticized the majority’s interpretation of the DMCA:
“The majority’s decision thus permits ISPs to sell an internet connection to every single infringer who wants one without fear of liability and without lifting a finger to prevent infringement. It also means that Cox is free to abandon its current policy of responding to copyright infringement. [U]nder the rule the majority adopts today, the safe harbor provision will not “d[o] anything at all” going forward. . . . Congress did not enact the safe harbor just so that this Court could eviscerate it.”
Nevertheless, because she did not believe the requisite showing of intent had been made in this case, she concurred in the judgment.
Limitations
Cox Communications v. Sony Music only applies to internet service providers, what the common law described as “conduits.” It does not directly apply to people who copy, distribute or host infringing material.
Also, the Court noted that an ISP normally does not actually have knowledge of the identity of the user who is committing direct infringement. It has records of IP addresses associated with accounts, but a single IP address might be used by multiple people, not all of whom are infringers. It is possible that in a different case, where the defendant actually does know the identity of the specific direct infringer, the requisite finding of intent might be easier to make. Future cases will need to flesh that out.
Implications
As Congress and courts grapple with emerging generative AI copyright issues, it is likely that attempts will be made to apply the principles announced in Cox Communications v. Sony Music to generative AI architecture. While the internet is a neutral data conduit, large language models that drive generative-AI function by ingesting massive datasets of protected works to optimize their commercial output. Rights holders argue that building a system dependent on unauthorized ingestion constitutes direct or secondary infringement. However, the intent requirement articulated in Cox provides AI developers with a potentially expansive defense to output infringement. If providing a tool with the simple knowledge that users may generate infringing outputs is legally insufficient, then the battleground over generative AI must shift. Because generative AI tools arguably have substantial, non-infringing uses, litigators will need to prove intent to induce infringement to prevail on a contributory output infringement claim. The potential impact on input infringement claims, of course, is a different matter.
We are already seeing this defense framework reshape federal dockets. In June 2026, tech platforms seized upon the Cox precedent to try to stop copyright claims at the pleadings stage. In a motion filed in Tennessee federal court, X Corp. invoked Cox v. Sony Musicto argue that music publishers’ secondary liability claims must be dismissed, asserting that the plaintiffs failed to allege explicit “affirmative inducement” rather than general platform piracy.
Practical Tip
Despite the Court’s ruling in Cox Communicationsv. Sony Music, platform providers may find it prudent to continue to comply with DMCA safe harbor requirements. Not only could this help them qualify for the immunities the DMCA provides, but it might also help demonstrate a lack of infringing intent.
This was one of the top copyright cases of 2022. It was a case that was pushing the limits of the transformative fair use of photographs. The Supreme Court issued a ruling in the case in May. The decision is significant because it finally reined in the “transformative use” doctrine that the Court first announced in Campbell v. Acuff-Rose Music back in 1994. In that case, 2 Live Crew had copied key parts of the Roy Orbison song, “Oh, Pretty Women” to make a parody of the song in its own rap style. The Court held that the 2 Live Crew version, although reproducing portions of both the original song and the original recording of it without permission, transformed it into something else. Therefore, even though it infringed the copyright, the 2 Live Crew version was for a transformative purpose and therefore protected as fair use.
In the thirty years since Campbell, lower courts have been applying the “transformative use” principle announced in Campbell in diverse and divergent ways. Some interpretations severely eviscerated the copyright owner’s exclusive right to make derivative works. Their interpretations often conflicted. What one circuit called transformative “fair use” another circuit called actionable infringement. Hence the need for Supreme Court intervention.
In 1984, Vanity Fair licensed one of photographer Lynn Goldsmith’s photographs of Prince to illustrate a magazine article about him. Per the agreement, Andy Warhol made a silkscreen using the photograph for the magazine and Vanity Fair credited the original photograph to Goldsmith. Unknown to her, however, Warhol proceeded to make 15 additional works based on Goldsmith’s photograph withour her permission.. In 2016, the Andy Warhol Foundation for the Arts licensed one of them to Condé Nast as an illustration for one of their magazines. The Foundation received a cool $10,000 for it, with neither payment nor credit given to Goldsmith. The Foundation then filed a lawsuit seeking a declaration that its use of the photograph was a protected fair use under 17 U.S.C. § 107. The district court granted declaratory judgment in favor of the Foundation. The Second Circuit Court of Appeals reversed, ruling that the four-factor “fair use” analysis favored Goldsmith. The Supreme Court sided with the Court of Appeals.
Noting that it was not ruling on whether Warhol’s making of works using the photograph was fair use, the Court limited its analysis to the narrow question whether the Foundation’s licensing of the Warhol work to Condé Nast was fair use. On that point, the Court determined that the use of the photograph to illustrate a story about Prince was identical to the use Goldsmith had made of the photograph (i.e., to illustrate a magazine article about Prince.) Unlike 2 Live Crew’s use of “Oh, Pretty Woman,” the purpose of the use in this case was not to mock or parody the original work.
The case is significant for vindicating the Copyright Act’s promise to copyright owners of an exclusive right to make derivative works. While Warhol put his own artistic spin on the photograph – and that might have been sufficient to sustain a fair use defense if he had been the one being sued – the Warhol Foundation’s and Condé Nast’s purpose was no different from Goldsmith’s, i.e., as an illustration for an article about Prince. Differences in the purpose or character of a use, the Court held, “must be evaluated in the context of the specific use at issue.” Had the Warhol Foundation been sued for displaying Warhol’s modifications of the photograph for purposes of social commentary in its own gallery, the result might have been different.
Although the holding is a seemingly narrow one, the Court did take the opportunity to disapprove the lower court practice of ending a fair use inquiry at the moment an infringer asserted that an unauthorized copy or derivative work was created for a purpose different from the original author’s.
Statute of Limitations and Damages
Warner Chappell Music v. Nealy
The U.S. Supreme Court granted certiorari to review this Eleventh Circuit decision. At issue was whether a copyright plaintiff may recover damages for infringement that occurred outside of the limitations period, that is, infringement occurring more than three years before a lawsuit was filed.
The circuits were split on this question. According to the Second Circuit, damages are recoverable only for acts of infringement that occurred during the 3-year period preceding the filing of the complaint. The Ninth and Eleventh Circuits, on the other hand, had held that as long as the lawsuit is timely filed, damages may be awarded for infringement that occurred more than three years prior to the filing, at least when the discovery rule has been invoked to allow a later filing. In Nealy, the Eleventh Circuit held that damages may be recovered for infringement occurring more than three years before the claim is filed if the plaintiff did not discover the infringement until some time after it first began.
The United States Supreme Court has resolved the Circuit split. Read about the Supreme Court’s decision in Warner Chappell Music, Inc. v. Nealy.
Artificial Intelligence
Copyrightability
Thaler v. Perlmutter
This was an APA proceeding initiated in the federal district court of the District of Columbia for review of the United State Copyright Office’s refusal to register a copyright in an AI-generated work. In August, 2023, the district court upheld the Copyright Office’s decision that an AI-generated work is not protected by copyright, asserting that “human creativity is the sine qua non at the core of copyrightability….” For purposes of the Copyright Act, only human beings can be “authors.” Machines, non-human animals, spirits and natural forces do not get copyright protection for their creations.
Many cases that are pending allege that using copyrighted works to train AI, or creating derivative works using AI, infringes the copyrights in the works so used. Most of these cases make additional claims as well, such as claims of unfair competition, trademark infringement, or violations of publicity and DMCA rights.
I have been blogging about these cases for some time and periodically provide updates on them.
This is the “parody goods” case. VIP Products used the “Bad Spaniels” name to market its dog toys, which were patterned on the distinctive shape of a Jack Daniel’s whiskey bottle. VIP filed a lawsuit seeking a declaratory judgment that its product did not infringe the Jack Daniel’s brand. Jack Daniel’s counterclaimed for trademark infringement and dilution. Regarding infringement, VIP claimed First Amendment protection. Regarding dilution, VIP claimed the use was a parody of a famous mark and therefore qualified for protection as trademark fair use. The district court granted summary judgment to VIP.
The Supreme Court reversed. The Court held that when an alleged infringer uses the trademark of another (or something confusingly similar to it) as a designation of source for the infringer’s own goods, it is a commercial, not an expressive, use. Accordingly, the First Amendment is not a consideration in such cases.
Rogers v. Grimaldi had held that when the title of a creative work (in that case, a film) makes reference to a trademark for an artistic or expressive purposes (in that case, Fred Astaire and Ginger Rogers), the First Amendment shields the creator from trademark liability. In the Jack Daniel’s case, the Court distinguished Rogers, holding that it does not insulate the use of trademarks as trademarks (i.e. as indicators of the source or origin of a product or service) from ordinary trademark scrutiny. Even though the dog toys may have had an expressive purpose, VIP admitted it used Bad Spaniels as a source identifier. Therefore, the First Amendment does not apply.
The Court held that the same rule applies to dilution claims. The First Amendment does not shield parody goods from a dilution claim when the alleged diluter uses a mark (or something confusingly similar to it) as a designation of source for its own products or services.
International Law
Abitron Austria v. Hetronic International
Here, the Supreme Court held that the Lanham Act does not have extraterritorial reach. Specifically, the Court held that Sections 1114(1)(a) and 1125 (a)(1) extend only to those claims where the infringing use in commerce occurs in the United States. They do not extend to infringement occurring solely outside of the United States, even if consumer confusion occurs in the United States.
The decision is a reminder to trademark owners that if they want to protect their trademark rights in other countries, they should take steps to protect their rights in those countries, such as by registering their trademarks there.
Patents
Patents are beyond the scope of this blog. Even so, a couple of developments are worth noting.
Enablement
Amgen v. Sonofi
In this case, the Supreme Court considered the validity of certain patents on antibodies used to lower cholesterol under the Patent Act’s enablement requirement (35 U.S.C. sec. 112(a)). At issue was whether Amgen could patent an entire genus of antibodies without disclosing sufficient information to enable a person skilled in the art to create the potentially millions of antibodies in it. The Court basically said no.
If a patent claims an entire class of processes, machines, manufactures, or compositions of matter, the patent’s specification must enable a person skilled in the art to make and use the entire class. In other words, the specification must enable the full scope of the invention as defined by its claims.
My vote for the most the significant IP decision in recent times is Andy Warhol Foundation v. Goldsmith. Lower courts had all but allowed the transformative use defense to swallow up the exclusive right of a copyright owner to create derivative works. The Supreme Court provided much-needed correction. I predict that going forward, the most significant decisions will also be in the copyright realm, but they will have to do with AI.
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